The best hotels in the world have been named by TripAdvisor, with Switzerland's historic five-star Grand Hotel Kronenhof taking the coveted No. 1 position in the annual Travellers' Choice Awards ahead of Hong Kong's small luxury boutique property The Upper House, and the over-water bungalows of Gili Lankanfushi in the Maldives.

The 12th annual awards also named the best Australian hotels with the Emirates-owned Wolgan Valley Resort in NSW's Blue Mountains taking the top place.

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Wolgan Valley is a conservation-conscious spa resort with 40 luxury suites. They have their own decks and pools and are in a bush setting.

Switzerland's historic five-star Grand Hotel Kronenhof has been named as the best hotel in the world in TripAdvisor's annual Travellers' Choice Awards.

Runner-up in Australia was the Gold Coast's beachfront Xanadu Holiday Resort, ahead of the Coconut Holiday Resort in Cairns.

Queensland resorts, including Hamilton Island's Qualia, dominated the rest of Australia's top 10, as they have in previous years.

The high-end Southern Ocean Lodge at South Australia's Kangaroo Island did not figure in Australia's overall top 10, but it was prominent in a number of other categories including top luxury hotel in Australia, best hotel for romance in Australia and top small hotel in Australia.

"We've taken it from the hotel with the worst reputation in the region to the best," says Morwell Motel co-operator Grant Maddern.

Even the humble Morwell Motel in Victoria's working-class Latrobe Valley came out a winner. It was named the best bargain hotel in Australia and came second to Southern Ocean Lodge in the small hotel category.

"We bought the hotel 18 months ago. We closed it for four months and did a half-a-million dollar renovation and now we've taken it from the hotel with the worst reputation in the region to the best reputation."

Rooms at the hotel, with just two full-time staff, start from $120 and are mainly taken up by corporate travellers who enjoy the funky interiors, $9 continental breakfasts delivered to the room, free wi-fi, a Nespresso coffee machine with unlimited coffee, and a small gym.

"It's all about the service and going above and beyond," Mr Maddern said. "Last week when it was hot we went into the rooms before guests arrived and put on the air con for them. We do the same in winter, to make sure it's warm when they arrive. We provide real milk, not that s----y long-life stuff, and free bottled water."

TripAdvisor is the world's largest travel website. According to TripAdvisor, the winners of the Travellers' Choice Awards are based on millions of reviews and opinions site users gathered over a 12-month period.

A spokesperson said TripAdvisor uses an algorithm that measures the quality and quantity of the ratings from traveller reviews and opinions on the site to determine the winners.